Rio Tinto to scale back New Zealand aluminium smelter ops on Covid-19

[MELBOURNE] Rio Tinto Ltd will close one of the aluminium production lines at its smelter in Tiwai, New Zealand, to comply with government restrictions to contain the coronavirus, its New Zealand's Aluminium Smelters (NZAS) venture said on Tuesday.

New Zealand is in a four-week lockdown to limit the spread of the coronavirus that has infected more than 750,000 people globally.

The company will close the pot line 4 at the plant and affected workers will be reallocated to other areas of operations, Rio Tinto Aluminium New Zealand said. Rio Tinto put the loss-making smelter, which produces 340,000 tonnes of aluminium per year, under review in October.

"Our focus is on supporting our employees in a time of uncertainty and running a safe and efficient operation to meet our obligations with customers and suppliers who are also challenged at this time," NZAS chief executive Stewart Hamilton said in a statement.

NZAS plans to work with New Zealand power provider Meridian Energy Ltd to reduce the 50 megawatts of electricity that supports pot line 4.

Pot lines contain electrolytic cells where alumina is heated to become aluminium. The Tiwai smelter uses hydropower making it among the cleanest aluminium plants in the world.

NZAS will work on winding down the pot line this week, and reallocate 35 staff to its three other production lines, it said.

NZAS is a joint venture of Rio Tinto, with 79.36 per cent, and Japan's Sumitomo Chemical Co, with 20.64 per cent.

The smelter made a loss of US$46 million after income tax and excluding exceptional items for the last financial year compared to an underlying profit after income tax of US$21.6 million for the prior year.

Rio Tinto has said that it expected to announce the findings of the review by the end of the first quarter of 2020. A spokesman told Reuters on Tuesday, however, that a decision had not yet been made on the plant's future.

REUTERS